HR Technology Conference 2014: Global Payroll

If you read this blog, you know I like order and simplicity.  I want everything in one place.  My scale at home weighs me and integrates to my calorie tracker.  my calorie tracker integrates with my fitness tracker.  I know how many calories I’ve eaten, how many I’ve expended, and if my weight trend is on target or not.  It’s all in one app even though all the data gets entered in separate places.  This is the world I want for global payrolls, but…

Seriously, global payroll is such a PITA.  It’s just too hard to figure out how to get all of your payroll vendors on a single platform or even a single vendor.  Local countries want their own autonomy, but corporate controls want centralized reporting and GL integrations.  Because if the very disparate local compliance issues, it’s incredibly difficult to normalize much of the global payroll environment.  Here are a couple of quick vendor thoughts that have been coming into focus and reality for a couple years:

  • ADP Streamline.  I don’t quite understand this service, but Streamline can basically take ADP global payrolls and consolidate much of the payroll data into one place.  This allows for generally centralized reporting and results.  The weakness of this model is that it’s not in the ADP HCM applications and can’t do reporting that has HCM data in it (afaik)
  • Ceridian Dayforce Payroll.  I don’t remember the name of their product, but Dayforce HCM is basically able to take Ceridian global payrolls and dump things into the Dayforce application, again providing consolidated reporting.  The weakness of this is that it’s in Dayforce HCM, and not everybody wants to run Dayforce HCM.
  • There are other great global payroll vendors that I like (Celergo comes to mind) but I didn’t visit them this particular HR Tech, so I won’t comment.

The idea of having a single payroll vendor doing all of the work in one place is fantastic, but it’s really pretty mythical.  Not one vendor can cover the entire globe, and most companies will have a gap somewhere, even with the big vendors like ADP and Ceridian.  Most organizations will try to get to 2-3 vendors to cover the globe, and some of them use outsourced BPO arrangements like AonHewitt or NorthgateArinso to coordinate these services.  Either way, single consolidated global payroll data is either on multiple vendors, or you spent millions of dollars and years of time consolidating on legacy HCM like SAP or PeopleSoft.

The other observation I’d make is that most global payroll organizations have to stack rank their companies for who is going onto a centralized platform and who is not.  For example, most companies decide on an employee count threshold to determine if it’s worth moving them to Streamline; under 100 employees and the cost of adding a Streamline country may not be worth the ROI.  These smaller countries are often left to their own devices and more manual integrations.

All in all, global consolidated payroll is still a bit mythical, but the last couple of years brought significant capabilities where the major vendors now have the ability to consolidate more than they had in the past.  As country footprints continue to increase, maybe a single global payroll provider is not such a distant future.

HR Technology Conference 2014: Recruiting System Thoughts

Overall, this year was one of the best years in a while for the vendor and show floor.  In my opinion, there were some significant areas where technology has finally started catching up with vision, and it was happening on a pretty broad level.  The smaller startup vendors from the last year have pushed the bigger players, creating a lot of positive movement.  More on that in another post.

Let’s start off with recruiting because…. well everything starts off with recruiting.

User Experiences:  
The idea that you can take any of the older recruiting experiences like Taleo, Brassring, PeopleSoft, etc and wrap a UX around it is fantastic.  Half of the candidate problem is process and interview experience, but it all start with being able to submit an application in the first place.  We all know when we’re in the never ending PeopleSoft application submission process because most of us have never actually gotten to the end of it.  Manager experiences are equally bad, and half of our organizations can’t get managers to use recruiting functionality because it’s so bad.  We have HRBP’s supporting them instead.

  • Jibe has been around for a few years that I know of, and they have an incredibly elegant candidate, manager and recruiter experience.    Jibe avoids all of that by cleaning up the experience, making it mobile and easy, and doing for a huge selection of ATS systems.  I do have some concerns with their laser focus on the user experience since at some point the vendors might catch up and make the UX overlay unnecessary, but for now and the next few years, there is a huge amount of opportunity for them.
  • Findly is an organization that I just don’t understand their core ATS differentiator, but they also have the ability to wrap a UX around Taleo, Brassring and SuccessFactors recruiting.  At this point they are only doing a wrap around for the candidate experience, but it’s pretty decent.
  • Many of the newer cloud ATS (including the ones mentioned below) have great UX – being architected in the last 5 years puts them far ahed of the old generation, and really makes it unnecessary to wrap a different UX around it.

Old vs. New ATS
One of the things I’m desperately trying to figure out is when the new vendors will be ready to fully take over the mantle from the older recruiting vendors.  We still have the old school, behemoth vendors with such robust and rich feature/functionality that deployment and maintenance of the applications just are not agile.  Then we have the new school of recruiting applications that are very agile, but don’t have nearly the depth in functionality.  Somewhere in the middle is a happy medium that allows 95% of our organizations to get what we need and manage staffing practices with the speed at which the employment market changes.

Just to name a few, we have Jobvite with good ATS adoption, but it’s obviously not Taleo in functionality, we have Smashfly who started in the referrals business and is trying to broaden functionality quickly, Hirevue started in interviewing and is also trying to grow into other areas.  All of the systems have gaps, and at some point the gaps are small enough that system viability is unquestionable over the old ATS.  Right now, this feels a bit like 2007 when the talent systems started buying each other ,but there were always clear strengths based on where the vendor’s original functionality was.  it took 5 years before end to end talent was truly viable.

Recruiting CRM:
I’m still seeing a pretty big gap in really capable recruiting CRM systems.  Integration to the truly powerful content marketing engines and really deep CRM that comes close to matching traditional CRM is just not there yet.  That said, there are recruiting CRM systems that do a great job, but there are not that many of them.

I’m pretty excited about recruiting systems this year.  I do think we’re in a transition phase where the old stuff looks a lot older this year, and the new stuff starts looking pretty good.  Next year should hopefully see more maturity and hopefully the start of the changing of the guards.

Infographics Suck

I was riding my bike around Marin (north of San Francisco) this fall, it was a bit cloudy, grey and not as bright as usual.  Just the week before, I had purchased a new pair of lenses for my sunglasses, just for this occasion, and I was absolutely stunned at the difference it made to my ride.  I felt like I was seeing the road and the vistas for the first time.  Indeed, it was simply the first time I was seeing the views with a Yellow #20 lens.  The reality is that I’d done this exact ride dozens of times before.  I commented my amazement to my riding buddies, how different everything was, brighter, more cheerful, and happy.  But alas, it was just the Yellow #20 versus my usual middle grey.

The current world seems to be in love with the infographic.  Hell, I’m in love with the infographic.  They are pretty, colorful, easy to understand, present only the key pieces of information that you need.  In 45 seconds, every one of us can be conversant in a topic with a very defined point of view.  Well, actually, this is exactly the problem.  You see, while the infographic is a very valuable tool, we should all realize that it’s there as a precision marketing tool.  It is there just to provide a point of view, not a complete conversation.  Here are a couple of things you can do to combat “infographic conventional wisdom.”

  • Take infographics with a grain of salt – statistics are useful, but remember that there is a whole book called “how to lie with statistics.”
  • Question everything – we don’t always look at the source, nor do we ponder the alternative points of view when looking at these things.
  • Evaluate the publisher – if the infographic comes from a vendor, just remember it’s a marketing tool.
  • Rely on research – infographics will continue to be a good source for quick summaries, but research with full commentaries still outvalue the quick infographic by far.

So why am I writing this in an HR blog?  As buyers of HR technology and services, if we are not already flooded with infographics, we will be quite soon.  We love these things for good reason – they are so easy to use, and marketers know it.  Hell, I’ve been known to produce an infographic when I’m presenting a business case to a steering committee.  The problem is it’s too easy to take them without full context and conversation.  90% of the time they are a single point of view only, and an alternative vendor may have statistics proving why their own software is better in exactly the opposite direction.

This great infographic from http://visual.ly/effectiveness-infographics.

InfographicsSuck

 

 

 

 

 

 

 

 

 

Is Cloud The Way To Go?

So I had to upgrade my cell phone contract.  I used to be on this thing where I had a bucket of minutes and text messages to use, and now I’m on exactly the opposite.  I have unlimited phone and text and about 10 GB of data I can use every month.  It really points to a shift in how we as users of wireless devices are working.  Less and less of our days are spent actually talking to each other, and more of our days are spent collaborating through various mechanisms that involve data.  I will admit to spending an exceptional amount of time browsing news on my phone, looking through facebook updates to keep tabs on people, and using my phone for work emails.  Nobody calls me anymore, and if they do, I get my voicemails through data (I read my VM, have not listened to one in years).

One of the big questions these days is about SaaS and Cloud.  Should we do it?  Should we stay on PeopleSoft or SAP HCM?

The answer for SaaS is a definitive Yes.

At some point, be it this year, next or in 5 years, you are going to move to the cloud.  I’m not an opinion about your current on-premise strategy, and I’m not making a judgment of you if you disagree.  I’m simply stating a fact.  Let’s tale a look at the facts:

  • ADP: The actual development of the Enterprise HRMS client server product is probably severely limited.  I don’t even know if they sell it anymore.  We do know that ADP Vantage is what they are selling and developing.
  • Oracle / PeopleSoft:  We’ve all heard about applications unlimited, but for those who thing that in 2020 we’ll still be going to a PeopleSoft Track at OpenWorld, I think you really have to evaluate your reality.  The developers are all on Fusion.  Let’s say you are right and there is still a PeopleSoft product in 2020.  How long do you think it will have been since your last major product enhancement?
  • SAP: Well, there’s HAHA, and there’s SuccessFactors.  Either way, SAP kind of knows that they are pouring development resources into the cloud.  Same conclusion as with PeopleSoft – it will be around for a while, but that’s not the whole reality.
  • Workday:  It’s already in the cloud from the start – no discussion here.
  • Talent Management: It does not really matter if you bought Taleo, SuccessFactors, Cornerstone, PeopleFluent, (I’m going to get in trouble for leaving out 50 companies), you bought into the cloud long ago for TM.

I’m not really trying to change your mind on the cloud here.  It really does not matter.  If you are an HR technology buyer, you simply don’t have a choice.  The vendors and the industry are in the midst of choosing for you.  In just a few short years, all of your premise based HR technologies are going to cease or significantly slow their development efforts and fully shift to the cloud.  If you want to be on a product that will be continuously developed, that is where it will be.

Just in the same way I really don’t have a choice to stay on my old cell phone plan, the world is moving on when it comes to HR applications.  It’s time to move with it.

Cedar Crestone HR Technology Survey: Create a Winning HR Function

All too often, I get an industry report to read and end up saying to my colleagues, “wow this is crap.”  Case in point, at the end of 2012, I got a widely read industry report that rated a halfway decent HCM provider’s payroll engine to be better than one of the major payroll outsourcers.  They stated that a vendor’s almost non-existent compensation functionality was a top pick.  Each year, I go through the CedarCrestone HR Technology Survey, and hope there is something wickedly out of sync with conventional wisdom.  Each year, Lexy proves why she is the queen bee of HR surveys and is meticulously above reproach.  I just can’t stand it.

What’s great about this particular survey is that it’s not just gathering data and spitting it back out at you.  I know we all care how many people are buying Workday versus Fusion versus Employee Central versus … this year.  I know we all are interested how many of us are still on premise with our core HCM.  That’s so not the point.  What Lexy does is far more interesting.  She takes all of this data and compares it to company profiles.  What’s the correlation of profitable companies to those people who are running Software X or Technology Y?  This makes up the part of the report I’d like to chat about.  Lexy published 7 habits, and I’m going to summarize so you’ll just have to ask CedarCrestone for the report to read the whole thing.

The attributes that defined successful companies were pretty much higher than usual revenues per employee, profits per employee, operating income and return on equity.  Pretty good measurements.  I’m not sure if CedarCrestone evaluates which is causal, but they do evaluate correlations, so in that sense, go after what you can control, which in our case is the HR side.

  • User Adoption – “If you build it, they will come.”  What a load of crap – wasn’t that some baseball movie Kevin Costner was in?  I don’t remember, but it certainly does not apply to HR technology.  Instead, we have to implement ridiculous change management strategies just to get our managers and employees engaged with us.  If not, we only hear from them when their payrolls are wrong, or to complain about the vacation policy.  The reality is that organizations who successfully implemented solutions, had good change management programs resulting in high user adoption also ended up being among the more successful companies.
  • Buying Habits and Governance – Governance always seems to play into things.  I’ve found that the few organizations that are great at governance tend to be awesome places to work, make good decisions, and have high employee engagement.  So I’m stretching Lexy’s observations here, but basically when I reflect on her finding that successful companies have more technology and spend less per employee, I almost immediately translate that into good governance.  How do you get to better utilization of what you have, and only buying what you need after all?
  • Technology Decisions – There was also a couple of themes that I translated into low maintenance overhead, but also the ability to use industry best practices.  It kills me when I walk into a client that is so highly customized they really don’t know what they are doing anymore other than accepting new requests and implementing full time.  Most of these organizations don’t even know why or what the business case is – they just do it.  Successful companies are correlated to low customization, which is also correlated to SaaS purchases.
  • Data – One would automatically think that successful companies are good with data.  It seems obvious.  The survey actually points out a couple of great tactical elements to get you there.  The first one was integrated talent management with your core HCM product.  Companies that were there tended to have a significant advantage than others.  The second was the utilization of mature business intelligence models, along with the deployment of that data into manager’s hands where agile business decisions can be made.

At the end of the day, HR just wants to be heard.  Interestingly enough, there are elements of shoring up our own house as well as focusing on outcomes here.  If we make bad decisions and have crappy governance, well that’s problem number 1.  But if we also have crappy user adoption and poor data, we’ve also lost the game.

Note – nowhere in this did we correlate functionality to success!

Switching Gears

A long time ago, I used to work for ADP doing pre-sales.  We had great relationships internally with services and implementation, but nonetheless it always seemed to come up that we didn’t always sell with the full lens of reality.  On the other hand, I’d say that we came up with some pretty cool solutions to some pretty tough problems.  In today’s world, I’m generally thought of as a strategist.  I do lots of planning type of work whether it’s strategic 3 year plans, some implementation planning, or just some business case writing.  My current project (depending on when this posts), is a global implementation of a new core HR system for which I had a major hand in writing the business case.  I’ll start by saying that I’m really not suited for implementations, but the experience is quite eye opening.

There is no blame for anything that happens in pre-sales here.  For this current project, we had probably one of the best consultants available both from functional and technical resources.  The problem that happens in pre-sales is that you don’t actually have finalized design yet, so all discussions are really quite hypothetical.  “So how would the application perform ABC?”  “Well, there is option 1, or 2, or 3.”  And of course if we wanted to solve for problem XYZ, there are solutions 7, 8, and 9.  Where the hard part comes in is that while all of the presented solutions are not only possible, but implementationally viable, mixing and matching does not always work.  Solution 2 might be dependent on implementing position management, and solution 3 might not work with solution 7.

When I was with ADP, there was sometimes the thinking that we threw things over the fence.  First of all, I think this happens with all vendors.  Second, I don’t think we ever really threw things over that proverbial fence.  Instead, we just didn’t know what a client was ultimately going to do, so we presented all the possible options.  In a sales cycle, you really don’t have the time to go into every nuance of every solution, and most of the time you have consultants like me driving tight timelines and moving discussions forward before “analysis paralysis” occurs.

I remember back in the day when ERP implementations would last for years – things would come up, we’d switch directions, something else would come up, we’d backtrack because the application didn’t work the way we expected it to.  Reflecting on my own experience, I realize how much we could not have known in the sales cycle, and what that meant for the implementation.  Implementation consultants have a really challenging job.  “But you guys told us we could do option 3!”  “Ok client, but you didn’t tell us that you wanted 1 job code for the entire company.”  (I’m kidding about that one)

Once we have requirements and design, I have a whole new respect for how implementers get around to explaining how the whole application actually works with all the nuances of each functional component.  I’ve always loved how sales consultants can dance around solutions for a system that if completely fictitious at that point, but am equally amazed at watching implementers dance around requirements once they start to solidify.  Hats off.

 

Talent Evolution versus Revolution

If you just bought one of the new 3D TVs that have been on he market for a year or so, i have bad news for you. Its already old technology. Sure, 3D is brand new, and its going to be around for a long time. But wearing glasses will be gone in a year or two. The current set of 3D TVs out on the market utilize the simplest and most obvious form of creating a 3D image – it presents different images to each eye, simulating the different angles that the eyes wold usually visualize depth with. Whether this is done with glasses that shutter the image at high speeds, or glasses that filter images bed on horizontal and vertical filtering, it does not matter, you are basically presented with a different image to each eye. As I said, is obvious.

Now, say you could trick the brain instead of the eyes. Your eyes perceive depth based on different viewing angles that the brain then interprets into three dimensions. But the brain can also read depth based on the amount of time that it takes for multiple slices of depth to be received into the eyes. For example, when you look at someone’s face, the light rays from their nose are received before the light from their ears. While this amount of time is completely imperceptible, if you can create a an image of someone’s face that is received over multiple, almost instantaneous moments, you can trick the brain without having to trick the eyes. ((this is indeed one of the methods being used in new, glassesless 3D technologies such as television. Unfortunately the cost of production is incredibly high, uses up to eight cameras, as opposed to the two cameras necessary for traditional glasses 3D viewing.))

The point is that while 3D is the new wave of television viewing, and while the 3D concept does not change between current and future technologies, the actual technology is a huge leap of revolution, not evolution. We are using a completely different concept to simulate a three dimensional image, even though the end result is the same. But now we can do it in the foreseeable future without tools like glasses between ourselves and the image.

The same goes for talent management. The first round of talent management was pointed in the right direction. We knew that the end result we were going after was to acquire higher quality talent, develop them with more rigor, and retain the high quality talent for a longer period of time. Whether this was actually effective or just an automation of the process is debatable, but the end vision was clear.

Today’s vision of talent management end state has not really changed from what I described above, but the means are no longer process based. Instead, we realize that each of the individual processes must integrate with each other to create meaningful programs that we had not thought about years ago. Our cohesive talent programs are not based in technology or simple process flows, but the integration of multiple programs and the data they each individually provide tho the broader talent strategy.

We can view people all we want for performance purposes, but a performance view does not provide abundant talent insight to a pharmaceutical that needs to focus on senior scientists, or a services organization that needs to move high quality talent around the organization to grow the next generation of leaders. Simple talent management techniques and processes are good in what they do, but they don’t vision the specific end state of each organization without the input of many other areas.

Today’s talent management is not a simple evolution from where it was several years ago when the vendors led our thinking around what talent management should be. Todays talent management has finally focused on what we as organizations need to individually accomplish out of it, we have surpassed what the vendors could have provided as a generic basis, and leapt to new applications that are inwardly and uniquely focused on ourselves. We will continue to depend on our technologies to aide us in data, process and integration, but application of end state will come from within ourselves and our organizations, not from vendors. For years, the HR industry had depended on HR technologies like applicant tracking, then core HRMS, then talent management for diction. I think we have finally turned the tide, we have finally turned the corner and started creating for our own. That i the revolution.

Fusion HCM Website is Up

Just an FYI since this appears to be about the softest launch we’ve seen in ages.  Considering we’ve been waiting for Fusion for a while.  Here’s an FYI that the website is up and perhaps the software is in GA (but you’ll have to ask Oracle to confirm that)

http://www.oracle.com/us/products/applications/fusion/hcm/index.html

Merge, Outsource, Re-merge

Imagine this. You’re fixing your house, and you take down a few walls to reconfigure how the place looks – it’s a bit more open, you can see more, put more people in it when you entertain. While you’re at it, you decide to put new walls up – perhaps a new powder room where there wasn’t one before, or a new bar area. But the bar area never got used, and you didn’t install water to go to in so you could have a sink and forgot the wine rack, so you take it back out since it wasn’t what you really needed. At the end of the day, you’ve spent a whole lot of money trying to get what you wanted, and then didn’t get what you wanted.

The trend has been going on in business for decades now. Organizations acquire or merge, and then merge common business units and functions. What follows is counter intuitive: after the merge comes the re-piece mealing of the business unit or function. Basically we merge things together and then break them apart again.

We’ve really done the same thing in HR. Over the last decade and more, we’ve tried to figure out what can go into HR shared services. We’ve dropped payroll and benefits in there, then we added HRIS and call centers. The first steps were easy, we gave payroll to the ADP’s and Ceridian’s of the world, and benefits to the Mercer’s and Hewitt’s of the world. Then we went a step further and gave away our call centers to HRO, going ultimately to a state of letting someone else do the transaction processing for us.

We thought this was smart, and in many of the cases, it was. We reduced our costs, created scalability through our providers, and theoretically instilled better quality. But a couple of years ago, we had one of those “uh-oh” moments – we realized that we did it wrong, perhaps went too far, or just didn’t prepare the right way. It’s not to say that outsourcing was bad, or even that we outsourced too much. But it did make us realize that simply outsourcing doesn’t get you to the end state without a lot of work.

What we’ve done in the last couple of years is pull back some of the outsourcing and reintegrate the processes back into our shared service centers. We realized that there is lots of stuff in HR that can’t be simple handed over to an outsourcer and scripted. After all, we’re not talking about accounts payable and cutting checks – much of what we do is nuanced and no matter how many process flows or scripts you write, there is always another unique problem heading towards you just over the horizon.

The problem with HR outsourcing is not that they can’t do what they do effectively. It’s that we haven’t figured out where to draw the lines. We give away the core employee indicative transactions like personal data or job changes. Yep – those are pretty easy. But along with that, we group the complex international movements in with the job changes. Often these are high potential or succession candidates that are getting moved around because we’re actively investing in their development. Rather than simple job changes, we’ve moved people between countries and business units, and both they and their managers are senior people in the organization that expect a high quality transaction. Outsourcers seldom bungle the regular transactions, but given the complexities of other types of movement, dissatisfaction rates can be pretty high. So we bring the transactions back in, but it was not the outsourcers fault – they were probably good at the basic stuff, and we were supposed to be smart enough not to give away the complex processes that were important to us.

I’m pretty sure we’re going to go through another round of this pretty soon. Everyone seems to be thinking about service delivery models, but we’re still thinking about efficiency and cost rather than effectiveness and services. Sure, we can save $100M on paper, but in most cases it didn’t work the first time around. Are we going to make the same mistake again?

HR Technology Deployments

I love it when consultants come in and talk to you about all the things you need to do around an implementation.  Obviously your implementer is going to do all the normal things around table configuration and testing, but they often miss some of the bigger items.  When consultants come in to talk about the other stuff, they are usually not particularly comprehensive – they like to talk about change management.  Change management is a wonderful thing, but it still does not mean you’re going to have a successful deployment, no matter how good the change program is.  There are so many things that go into swapping your HR technologies out that missing any of them could spell disaster.

  • Foundation.  I don’t know why so little time is spent on the foundation of any HR system.  Whether it’s core HR or talent management, there are some pretty big foundation issues that you should be looking at before you even think about starting an implementation.  Whether you like it or not, half of your problem with your prior system was not the system.  Half of your problem was that you screwed up the foundation, and had you gotten it right, you’d never be moving to a new system anyway.  Either you messed up the organizational structure and after that it was all downhill, or your jobs never made sense, or your security was horrible and ultimately your own poor security decisions ended up in horrific data quality.  Perhaps you didn’t really think through competencies or goals well enough when you did your first talent management implementation because the talent market was so young that nobody really knew what they were doing.  Either way, fix it now before you configure tables, because your implementer really just wants to get values in the table and stay on time – not help you figure out what the right org structure is for the next 10 years.
  • Decommissioning.  Ok, there are easy parts and hard parts.  The easy parts are reports, interfaces and data conversion.  Heck, that’s just part of any old implementation.  Of course we’re going to convert those.  But wait, did you say we’re not converting history?  How long are we going to have to access the old system for?  Does that mean we’re running reports out of 2 systems?  Wait, have we done analysis around the downstream systems and not just creating interfaces?  Listen, if you’re changing the org structure (see #1 above), you had better prepare every singe downstream system (and downstream from the downstream system) to get ready for new values or structures.  It’s not just about an interface or a report.  What you are doing is going to have far reaching impact – especially if it’s core HR.  Last thing you need to do is mess up some random headcount report that goes to the board of directors just because it comes out of a system 2 interfaces removed from core HR.
  • Implementation.  This is obviously one of the things that will get covered.  Your chosen implementer is going to be all over table configuration, and they are motivated to be on time and under budget.  That’s really where the problems comes in – you want them to be on time and under budget, but you’d also like to think that they are going to be strategically minded and help you out with other things above.  90% of the time they are not.  The cost model that your purchasing people drove them to simply won’t allow them to help you out, and even if thoy could, do you really want a group of people operating in the weeds of table configuration to also operate at the highest strategy levels?  Usually not.
  • Change Management.  Can we please get away from thinking that training and communication is all there is to change management?  Realistically, the estimate you should be using for change management should be about 20% of the implementation budget.  That’s right, if you are spending $1M on implementation, you should have a $200k budget.  When things start to get tight, the first things to go are any real hopes for change management.  If you don’t get your audience analysis and change strategy right, all you’re going to have are vendor provided training and generic communications.  Listen people, the new technology is 80% adoption and 20% everything else in the equation of success.  If you want to be successful, don’t cut the 20% of change management budgets, cut $200k out of your implementation and live without a piece of functionality.

Sorry – am I ranting?  It’s not just implementation, table configuration and change management.  You can get all of those perfect and still have a bad outcome.  In order to get it right, you have to do all of the activities, including the ones that are not totally obvious at first, and including the ones that your consultants are not trying to sell to you.

Evaluating the Demo

I’ll admit that a while back (wow – are we going on 10 years now?) I was an SC.  You know – those guys from the vendors that the salespeople count on to demonstrate product during the sales cycle.  SC’s are a highly valued commodity.  They are highly trained product experts that must float between the functional world that many of the HR practitioners in their audience live in, the technical world that many IT people in their audience live in, and the sales world that they are part of.  I mean seriously, how many people do you know that can have a functional, technical and sales conversation all at the same time?  The best SC’s are truly rare, have extraordinarily hard jobs, and in my humble opinion are actually quite underpaid for what they bring to the table.

I was attending the HR Demo show in December (put on by the one and only John Sumser) and it was really quite interesting watching back to back to back demos.  It was even more intriguing to listen to the commentary and watch the twitter feeds at the show.  Personally, I watched 3 demos (I was only there for the first day).  Not in any order, there was a horrific demo of a terrific product.  There was also a middling demo of a middling product, and a terrific demo of a fairly poor product.  However, I’m not sure that the verbal or twitter commentary really reflected this.  Part of this is the varying degrees of capability in driving through to what the core product capabilities are from either a functional or technological perspective, and reading past the SC’s ability to sell (that is after all what they are there for).  Let’s face it, a 1-hour demo of a product is designed and probably scripted to show all the best that a product has to offer.  The best SC’s are going to show all the flash in a way that looks incredibly simple.  Even if the product is absolute crap (I’m not saying I saw anything that was), the sales job is to convince you that you can do everything you need to do within the product and that the capabilities are not only sufficient, but that you love them.

At the same time, the technologists in the room are looking around at the exact same demo and not listening to a word about functionality.  Instead, they are watching the screens, table driven values, background integration, web architecture and all sorts of other things that are not being explained verbally.  Thus, I can watch an incredibly dry presentation but still come out of it saying, “wow, that was cool” while the functionally driven people in the room might be saying, “wow, that sucked.”  Functionally, if we are talking about core HR, I’m going to say that the product capabilities of the best demo and the worst demo were within 5% of each other.  However, technologists and functionally driven practitioners are going to come out of a demo with different perspectives.  Unless you are an analyst or have a specific background, I’m not sure that you’re going to be able to pull together these perspectives in a single individual.  That’s why, even though some HR people get a bit tight, we invite very broad teams of HR, IT, Finance, etc to watch demos.

As a parting thought, here are a couple of hints when you ask questions during the demo:

  • When the SC says, “Our clients handle that situation by using this functionality over here” means that it’s a workaround.  No matter how good and convincing the demo was, it’s a workaround and does not really exist.  You should also be aware that many of the workarounds that SC’s come up with are totally legitimate, but that the implementation groups may not be aware how to implement them.
  • When an SC says, “We suggest that you handle the situation this way” means there is a band aid.  You might be exiting the application, or using a workaround, but be in no doubt that once again the functionality does not exist.

Stop Selling Apps: SaaS is a Service

Increasingly, I’m seeing organizations change their buying habits, at least in theory. Vendor selections are no longer the total domain of functional requirements as they once were. We don’t care nearly as much about feature functionality and our ability to customize the software to our specific needs. Instead, we’re shifting to a couple of different concepts: first, it’s about the outcome. Second, it’s about the partnership. Maybe…

The problem is when we actually get into a vendor selection. I’m constantly in vendor demos where both the buyers and the sellers are totally focused on the functionality they need to present. Consultants still focus on the scripted demos that vendors need to skip, hop and jump through, and audiences still sit through demos asking questions like, “what does that button do?” Accordingly, vendors go to demos prepared with the full arsenal of System Consultant knowledge, tailored systems with client logos, and the ability to demo as much of the application’s “flashy stuff” as is available.

We like to pretend we are thinking differently, and in the back of our minds, we know we should be. But get us down to the details and we just can’t help ourselves. It’s almost impossible for buyers to back up a few steps and ask, “Can my employee link their career path to their internal job searches?” rather than “We have a field on the search results screen that tells employees what business unit the job is in.” One is outcomes oriented, the other is purely tactical.

The point of this post is that while we know the market is changing, it’s going to change with our without us, whether we like it or not. Forward thinking buyers are interviewing HR vendor executives to understand the level of partnership they are going to have. They are asking for client referrals and not talking about the software experience, but instead about service and support. Forward thinking vendor sales reps are not putting their eggs in the product demonstration – that is only a hurdle to them. Instead, they are creating relationships with HR executives outside of normal sales presentations to show clients what the experience would be like and to introduce them to key members of the product development and executive teams.

At the end of the day, we should care less about the software that vendors are providing to us. They all pretty much do the job. In the future, the differentiator will be about how dynamically a vendor will go through hoops to find solutions for the things about you that are genuinely unique. It’s about whether they care enough to find a solution and work with you, or if it simply goes on an enhancement request list 3 years long. It’s about whether your HR VP can pick up the phone and call a vendor executive when there really is a problem. I’ve seen good and bad vendor relationships throughout the years. While I’ll admit that in the past, poor functionality could certainly sink the relationship, the one commonality between the good relationships was the agreement to partner and understand how to provide and receive services.

Differentiation in SaaS

A while back, I was an SC for a large vendor organization.  It was a lot of fun highlighting the great stuff in my applications (actually – those were the fun parts).  But our jobs were to help find solutions as well as workarounds to things that could simply not be done.  Given this is a decade ago when functionality had not really arrived yet, Still, the differentiation between applications back then was about who had more functionality.  The depth of any HR application varied widely between vendors.  Today’s world is vastly different.

Is there really any differentiation in between SaaS vendors/  I mean, they all seem to say the same thing.  Everyone talks about great service, they all like to say how you don’t have to customize anything anymore, and every SaaS application is “versionless.”  The core things taht many of the SaaS vendors sell no longer really apply – SaaS vendors are so often competing against other SaaS vendors rather than legacy server based technologies where these were indeed valid arguments and true differentiators.

I’ve also argued that the days of functionality are pretty much over.  Vendors simply can’t compete on feature-functionality anymore.  Once again, there was a time when it was important, but today’s reality says that every vendor is going to have 98% of what you need, and the other 2% are probably nice to have’s that you can live without.  The truth of the matter is, feature functionality ruled in the days of long ago (what, all of 5 years?) when HR was the center of the HR universe.  We needed better transactions, more efficient processes, better storage spaces for more and more data.  That’s not true anymore.

Today’s center of the HR universe has transformed into employee’s and managers.  Those groups don’t need feature functionality.  In fact, it’s a Google and Apple world where minimalism and ease of use reign supreme.

The true differentiators for vendors is also evolving.  No longer is it feature-functionality, great service, or being versionless.  Today’s differentiation comes in the form of the analytics framework and how capable HR can be at delivering data to managers.  it’s about what I have called “enterprise digital interactions”  (social media) to help employees connect, collaborate and learn, it’s about how well you can use technology to create the simplicity that end users crave.

The problem is that feature functionality is easy to demo.  Whether analytics are really easy to create and consume, if end users will adopt digital interactions, or if the usability was hiding under a layer of slick demo style is sometimes hard to discover.  At the end of the day, these are the features that are differentiators today.  Feature functionality does not prove much anymore.  It’s about pushing your future vendor partners during demos, inviting end users (employees and managers) for a full court press during demos, and figuring out how to ensure that all the flash that your future partners are trained to demo is not all that you see.

Go to the HR Technology Conference

Really.

You guys know that I don’t usually pitch anything.  But I have pitched this show a few times.  It really is probably the largest gathering of HR people outside of the SHRM conference.  But you never hear people come back from the SHRM conference talking excitedly about… well, anything really.  Some people like the keynotes, but other than that, it’s just a big gathering.

The HR Technology Conference on the other hand always seems to have the blogger and twitter pages abuzz.  Analysts flock to see what is happening and what vendors are saying.  People talk about the Talent Management Panel for months, and I still remember who won every single one of the Vendor Shootouts.

But (you say) it’s just a big vendor meeting and a huge, organized sales meeting!!!  There certainly is a time and place for buyers and sellers to meet here, and that is valuable.  There are the 40 educational sessions, many lead by senior practitioners, and none of which is sold to a vendor like at so many other conferences.Even more valuable is for you to find out what direction the market is headed in.  What exactly are the vendors working on?  What is the next cool break in functionality?  What are your own incumbent vendors competing against and are they lagging, maintaining, or leading?  At the same time all of the consultants and bloggers are there, trying to figure out exactly those questions above.  Your peers are there in masses (which with the budget cuts these days is tough to find sometimes).

Head over to www.HRTechnologyConference.com and get registered.  Use the Promotion Code SYSTEMATIC10 (case sensitive) and as a reader, you will get a $500 discount off the on-site rate of $1,650.

What’s Next?

Just a few short years ago, it really seemed like the vendor space was leading the market with all sorts of great new functionality and new ways to think about the world.  After all, what would we have done if SoftScape had not coined the term “Talent Management”?  (I’m pretty sure it was them, but I’m not 100% sure, so if I’m wrong, don’t crucify me please)  Talent Management gave HR a completely new lease on life, helped us get the attention of executives, and got many of us the proverbial “seat at the table”.”  TM provided us a way manage our Human Resources, whereas before we were just another resource.

The SaaS vendor space provided us with dashboards while the rest of the organization was implementing them, but HR didn’t have the budgets or the technical capability.  We got analytics for cheap from vendors when our organizations didn’t seem to see the value of a $MM implementation for HR.

But lately, it feels like we’ve taken hold of all the new technologies and the opportunities it brought us and we are not trying to push our vendors faster and further rather than being tugged along.  While vendors consolidate and focus on platform integration, we’ve all moved on to thinking about long term talent management that goes beyond the processes of today and looks at the planning for 2 and 3 years from now.  We’re wanting to understand workforce planning and implement technologies to help us with it.  We want to understand internal mobility and get a handle on how increasing mobility engages, develops and retains our employee base.

But it’s not really all the vendor’s fault.  Sure, the vendors (some of them anyway) tell us they have some functionality, or that it’s on the way, but we in HR are certainly now pushing rather than pulling.  The problem for the vendors is that most of the new work is pure analytics and decision support.  To do workforce planning, we need to be able to project out where our businesses are growing and what skill-sets we will need a few years down the road.  Often, HR does not yet have this level of visibility in the organization.  Sometimes, the business as a while does not have the ability to know what the future brings in highly project and contract based businesses.  Others of us have more stable sales and business cycles that can be predictable.

I think we’ve gone forward with our thinking, but both the HR and Vendor capabilities are lagging, and we have come to count on the vendor space to provide us a solution for our problems.  Unlike with Talent Management where many of us didn’t even know we needed it, now we know we have an itch to scratch – and we are eagerly awaiting a stick to scratch it with.  I’m sure it will be great…  (just hurry up already)

Defining SaaS

Since I defined Web 2.0 already, I thought I’d also define SaaS for the masses.  Again, this is actually a fairly easy and straightforward technology to put some boundaries around.  First of all, I don’t actually like the moniker “Software as a Service” because it confuses most HR people.  At the core, SaaS does not add any additional “service” that it’s genetic predecessors did (simple hosting of applications in 3rd party data centers).  Regardless of my personal complaints about the name, some SaaS vendors do indeed provide additional services, but I don’t think these services are parts of SaaS, just differentiators between vendors.

So what is SaaS?

  1. Hosted:  First of all, the obvious.  A SaaS application is hosted by someone else – almost always a vendor.  Actually, I can’t think of a single SaaS application that is not hosted by the vendor who sells it.  The whole idea is to generate incremental revenues on a long term basis that are higher than premise based application’s license fees.
  2. Singe codebase:  I know that some vendors call themselves SaaS when they have the ability to host your application separately because you want to do something different than the rest of the vendor’s customers.  This is not SaaS.  To qualify as SaaS, the vendor supports a single codebase across all its customers.  There are exceptions, as the customer base expands and they have to increase the number of servers, vendors may take time to update all the servers.  However, in general, the vendor is supporting a singe codebase, or getting all the servers and customers up to the same codebase.

And to me, that’s all she wrote.  At the very basis of SaaS, there is not a whole lot to it. But you’ll see why I think the “software as a service” can be misleading.  People in HR misread “service” as some sort of additional customer support.  Indeed, a technologist would read it quite differently, and service really just means the provision of the application in a particular manner.

Bill Kutik and the Direction of HR Technology

A recent Bill Kutik Radio Show featured Tom Keebler of Towers Watson.  Tom is the Global Practice Leader of the TW HR Service Delivery Practice, and each year they run an HR Technology Survey that is probably the second largest in the industry (Lexy’s from CedarCrestone is significantly larger this year).  The TW survey is sometimes hard to get a hand on since it is distributed probably only to survey participants and Towers clients.  However, Bill gave us a brief look into some of the more interesting results of the survey, and for me, most of them happened to be in the vendor space.

While it’s no surprise that PeopleSoft has the most installs for core HR, it might come as a surprise that SAP has about a 20% market share.  This seems to be reflected in my own consulting as the number of SAP related projects or the number of core HR selections that involve SAP seems to be on the upswing.  The reasons for this seem to be simple.  In the large employer space, the number of companies who own SAP ERP far outstrips Oracle in any flavor including PeopleSoft.  All this means is that most of these large organizations already own SAP HR for free.  If you think about either SAP or PeopleSoft licensing when you get to 50k or 100k employees, you could really be talking about $5M to $20M annual software maintenance, so if you’re going to get HR for free, there seems to be some benefit to implement it.  That said, the integration that exists from a data and workflow perspective within SAP is hands down the best in the industry.  SAP flows transactions between ERP components like nobody’s business in real time.  Since PeopleSoft does not have nearly the same traction in other ERP modules (like supply chain, finance or CRM) they can’t boast the same thing.  There are of course tradeoffs in functionality or usability, but SAP seems to be catching up in the space.

What comes up as more of a surprise is that trailing PeopleSoft and SAP was ADP in 3rd place.  While I don’t know what the breakdown of ADP subscriptions is for small, medium and large employers, it’s probably safe to say that most of the subscriptions occurred in the TW small to medium space – that is under 20k employees.  What this does say about ADP is that they are getting lost of traction where organizations are still finding significant value in outsourcing payroll.  My thoughts on this is that 5 years ago when we were all excited about multi-threaded HRO, organizations are pulling back and looking at the ADP and Ceridian’s of the world to do single function outsourcing.  So while ADP’s Enterprise HRMS (v5?) is gaining momentum, I’m guessing that ADP’s GlobalView partnership with SAP is also doing well.  There are not that many organizations that can do global outsourced payroll like ADP can, and so companies with a major geographic footprint only have one place to go if they want a single vendor scenario.  (Single vendor yes, but lets remember than SAP and Cornerstone OnDemand are also part of the mix)

Last up on the list of interesting points was who the up-and-comers are.  This list seems to be based on who companies are planning to select or will be implementing in the next year.  On this list were Workday and SAP.  Again, the SAP is described above, but Workday has gained such traction in such a short amount of time that you have to be interested if they can keep up with the demand.  Certainly as the first true SaaS core HRMS, they have the ability for now to roll out functionality enhancements in the way that first generation Talent Management vendors were in the early days.  Second of all, their partnership for implementation with the Jeitosa’s and Towers Watson’s of the world should give them a bit of breathing space should the volume be larger than Workday can staff for internally.

It is a bit surprising to me that core HR seems to be changing at the pace that it is.  Usually when a market reaches a point of maturity, the vendor space settles down.  However, with the increasing viability of SaaS and the changing attitudes towards HR outsourcing, we continue to see an evolution of buying habits.  Here’s to core HR and keeping it fresh.

Note:  Sorry about the badge Bill, I’m just jealous I didn’t get a banner that looked like that.

Taleo versus SuccessFactors

At the end of 2009, Bersin did a great analysis of the two organizations that I can’t really beat.  It’s a nice objective and score by score view of the vendors that is based in good factual data, and I’m going to take a different approach, but you should read Bersin’s post first.  From my point of view, the discussion of the two vendors is quite simple, and the decision around to who has the advantage is also quite clear.

Let’s start with their roots.  It’s quite clear that Taleo is based on recruiting roots while SuccessFactors has the Talent Management side.  Both have ventured into each other’s strong suite, with Taleo having an incredible launch into performance a couple of years ago.  However, as time has gone on and the market has assessed the product, it may actually have been too much innovation for the average HR department to adopt and absorb.  I still think it’s one of the coolest products out there, but the change may have been too radical or restrictive.  Traditional performance vendors that were more flexible in allowing people to stick with processes that were somewhat similar to their current states might have been more comfortable during the selection process.  While we all say we want drastic change, when functional HR people really get down to business, I’m not sure it’s true.

SuccessFactors on the other hand has been reaching into recruiting.  Their first couple of sales came in 2009 and the product is in its infancy.  What Taleo has spent a decade developing, SuccessFactors has been at for a few short months and the product shows its weaknesses.  At the same time, Taleo’s recruiting product shows the immense configurability and options that the market wants, but does not get with the Taleo Performance module – sort of a contradiction.  SFSF’s Talent side gives the depth and maturity that simply isn’t there on the SFSF recruiting end.

Next, looking at their market presence, you decide who has the advantage.  While Bersin points out that SuccessFactors is in every RFP for Talent Management, Taleo is also in every RFP for Talent Acquisition.  This is not scientific at all, but I’m going to say that SuccessFactors has the advantage here.  My argument is that recruiting is not so much more complex than performance, compensation, succession, mobility, etc, and that Taleo has much more to build.  I’m also going to say that traditional recruiting is much more of a commodity, and that the Talent Management side is often seen as more of a business transaction.  Recruiting does not come out of commoditization until you get to mobility strategy, and that is generally a TM function than TA (granted cross functionality).  Its generally going to be easier for SFSF to build TA than for Taleo to improve the TM functions.

Lastly, looking at leading the market segments they specialize in, I’m going to say that Taleo has a pretty healthy lead in the TA market, and while SFSF is omnipresent, they don’t have quite the dominance simply due to the larger number of players.  Still, I think overall I’m looking at SFSF to be positioned better in the remainder of 2010 as the economy picks up steam and budgets continue to return.

Consulting Models

I was actually asked by a client recently to increase the scope of my project – or at least the staffing model we were using.  There are a more than a few consulting models, but I think it generally boils down to a couple of easy examples.  There are differences in philosophy I suppose, and perhaps I just don’t understand one of them, but I also don’t understand why people are so willing to waste money.

Some of the large consulting firms are well known for hiring masses of kids right out of college.  These new associates are paid premium salaries (I think these positions go for between $55-65K now), and can bill in the neighborhood of $200+ per hour for management consultants and not quite so much for implementation work.  Their work is supposed to involve lots of learning on the job, but it’s well known that the first couple of years can typically involve carrying the bags for partners, getting the partners coffee, and being general gophers.  These firms are also known for staffing larger teams with a few of these newer associates.  I consider this to be a bit bloated.

The model of any firm I have ever been with is more typical of the HR space, but certainly most common with the smaller boutique firms.  The staffing in the HR consulting industry tends to be much leaner, with a small core team of experts, perhaps some mid level consultants, and nary a “newb” in sight.  I’ll admit that I miss having my assigned note taker who will record every letter of the conversation and then transcribe it into semi-meaningful documentation, but on the other hand, with a crisper model, every dollar paid is a high quality dollar.

When organizations go out to bid for HR technology consulting, sometimes procurement teams or IT staffs are in charge of the selection.  Procurement sometimes is persuaded by lower average bill rates and larger teams that come with the systems integrators.  IT is often more comfortable with the guys that implemented their ERP system.  Unfortunately, these vendors don’t always know HR or have the same level of subject matter expertise that the HR firms do.

I suppose this is an unintentional plug for HR consulting firms in general.  I’ve seen it work very well where we do the strategy work and partner with a systems integrator who does the implementation.  At the end of the day, there is no trading the level of deep subject matter expertise that HR consultancies have.  Large consultancies have incredible depth between HR and total rewards with deep compensation and benefits consulting practices.  Smaller boutiques have incredible depth in HR technologies and vendor knowledge.  Depending on what you need, you’ll always find a great answer in one of the HR firms.

Support versus Change, Evolution versus Revolution

Jacob Morgan wrote a piece about adoption a while back, and he had a pretty interesting concept around supporting business process as opposed to change management.  This is really quite new to me, as we’ve always talked about change management and behavioral change as opposed to a softer concept of “support.”

You need to speak in terms of “supporting” rather than “changing”.  “Change” implies that people are doing things wrong.  “Support” however, implies that you recognize value of their efforts and you want to help further those efforts.  You can’t walk into a company and say “you guys are idiots, everything you’re doing is wrong,” because that’s not going to accomplish anything.  ((Morgan, Jacob, December 21, 2009.  “Strategic Principles for Enterprise 2.0 Implementation.”))

There are a couple problems with this.  Often, when you’re implementing a new system rather than upgrading, you really are looking for opportunities to change the current business process.  While we often implement on top of old process because we didn’t do the proper amount of future state visioning prior to kicking off the implementation, the purpose of the implementation is usually to fix the old system or process.  Seldom is it that we are spending millions on the implementation of a new product to simply support, enhance and bolster the existing.

I’m not sure you can’t walk into a company and say “you guys are idiots.”  We’ll, that’s not how I do it, and rarely do I think anyone is an idiot.  But it’s pretty common that I know their process has room for fundamental change and in most cases, they are hiring me because they know it too.  Same goes for implementing software, they usually know they need the help.

I’ll admit that the same does not go for the end user.  The end user does not see business process at the same level that corporate sponsors of these projects do, and often do think that all is ok.  But they also don’t necessarily see the opportunities that lie in leading practices around the HR industry either.  This is where adoption really occurs, is the end user and helping them get to a point of understanding that not only is this better for the organization, but also where the enhancements that will help them grow also.

I don’t think we are usually “supporting” or “evolving” their current business state.  I think usually we are trying to change things up.